GDP

GDP: Gross Domestic Product- total market value all final goods and services produced within a country's borders within a given year.

GNP: Gross National Product- Measure of what its citizens produce and whether they produce these items within their borders.

C: Consumption Expenditures (67%)

Finish goods and services

Ig: Gross Private Domestic Investment (17%) 

1.Factory equipment maintenance 

2.New Factory Equipment

3. Constructing housing 

4. Unsold Inventory of products built in a year 

G: Government Spending (20%)

The purchased of goods as service

Xn: Net Exports (-4%)

(Exports- Imports)

C+Ig+G+Xn=GDP

NOT COUNTED IN GDP 

1. Used or second-hand goods (Avoid double or multiple counting)

2. Gifts or transfer payments- Transfering money from one person to another.

-produces no output

-Public: Ex: Social Security, Welfare

-Private : Ex: Scholarship  

3. Stocks and Bonds

- Purely financial transactions 

-No output produced 

4. Unreported Business Activities (tips)

5.Illegal activities (underground)

6.Non- Market Activities (babysitting, volunteering)

7. Intermediate Goods (Avoid double or Multiple counting )

Expenditure Approach: were adding up all the spending produced in a given year (C+Ig+G+Xn=GDP)

Income Approach: all consumers how much money they make with a given year. (W+R+I+P)

https://www.imf.org/external/pubs/ft/fandd/basics/gdp.htm